Many homeowners are unaware of how foreclosure, loan modification and short sale affect their credit score in Idaho? Here are some approximate rules of thumb but each homeowners situation is is different so these are not in concrete.

Overview on affect on credit:

Foreclosure - A foreclosure can drop scores from 50-250 points and what is really interesting is the difference on the loss of points depends on how much you have to lose, for example, if someone has a 750 credit score, they could drop 250 points but someone with a 600 score may only lose 100 points for the same thing. If a deficiency judgment or tax lien is filed in connection with a foreclosure, credit scores can drop an additional 100 points. It may be 5 - 7 years before you can acquire another home loan.

Short sale

Paid as agreed won't hurt score as long as payments were kept current.
Unrated may drop a few points in addition to the drop because of the lates.
Paid settlement may drop the score by 50-125 points in addition to lates.
Charge off with a collectible balance may drop 100-150 in addition to lates, in this instance scores will not start to recover until the charged off balance is paid.
Judgment for deficiency amount - if lender files a judgment in addition to the charge off-scores can drop an additional 100 points from this, most severe impact on scores and credit.
It may be 2 - 3 years before you can acquire another home loan.

Deed in Lieu

Paid as agreed - scores will have already dropped about 100 points due to default in payments, but if this is reported, the borrower will be able to purchase another home in a shorter period of time.
Paid settlement - credit can drop 75/100 points in addition to the delinquent payments.
Foreclosure - scores drop 100-150 points in addition to the delinquent payments.
It may be 2 - 3 years before you can acquire another home loan. Most lenders want you to short sale your home first before they will consider you for a deed in lieu.

Loan Modification

Lenders may report it as an "account in partial payment plan", this can drop someone's scores by as much as 150 points in addition to lates. So it is important to make every effort to negotiate with the lender on how they will report: Not to report it in a partial payment plan. Remove any lates incurred during the waiting period of when the request for loan modification was made to the time of completion. Document every move they make, phone calls, etc. on their efforts to remain current on their payment.

We hope this helps you in making the right decision for you and your family. Please call us at 208 939 9033 if you need any further assistance.

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

PS: We've Helped More Buyers and Sellers than 99.8% of any Local Realtor

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Regards, Michael Hon, REALTOR®
CEO, The Iron Eagle Realty Team
Associate Broker, Silvercreek Realty Group
Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax: 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com